Borneo Oil Bhd is stepping up its involvement in gold by boosting its gold inventory and increasing gold mining activities. The Malaysian company has diversified into gold in recent years and is reaping the benefits.

The company’s inventory increased from 18,863 ounces at March 31 to 19,692 ounces a month later, with a value of about RM100 million, up from around RM94 million, or approximately US$24 million, the previous month.

Borneo Oil chairman Tan Kok Chor said the group had taken advantage of an increase in gold prices during 2015 to unload some of its gold inventory but with prices still holding up in 2016 was building it up again.

In the company’s annual report he said, “The group holds the view that gold should be treated as a perpetual asset to back its shares and to be cashed only when there is profit or through the sale of it through gold convertibles. The group is now studying how best it is to utilise this inventory.”

Through wholly-owned subsidiary Borneo Oil and Gas Corp Sdn Bhd (BOG) the group produced 27.35kg of gold from its mining operations in Merapoh, Pahang state, in the financial year ended January 31, 2016.

The gold and mining division recorded an increase in revenue to RM60.9 million from RM34.4 million in 2015 while net profit rose marginally to RM7.7 million from RM7.5 million.

Tan Kok Chor said that during the 12 months BOG had spent time evaluating a presence of colluvial gold-bearing soil and rocks. He said, “Intensive trenching, sampling and drilling is ongoing, and barring any unforeseen circumstances, a resource report will be out in the near future.”

BOG was appointed by Champmark Sdn Bhd in March 2014 as its contractor to prospect and mine alluvial and lode gold on an exclusive basis in an area covering 162 hectares in Merapoh. BOG later added two more Pahang mining leases at Bukit Ibam and Hulu Jelai to its operations.

Tan Kok Chor said 1200 hectares had been mapped at Bukit Ibam. “A heap leaching pilot plant with full production capacity of 7000 tonnes per cycle will be implemented once approval is granted for the process. We are confident we will recover more gold from this tenement and have set a realistic recovery target of 60% of gold from the gold-bearing ores through a non-toxic leaching process.”

On the group’s limestone mining activities in Sabah, he said it owned 328 hectares with limestone reserves of more than 20 million tonnes. “Plans are afloat to crush the overburden into aggregates as a feedstock to a clinker plant that is being planned for the eastern part of Sabah.

“Once the plant comes into operation, the group hopes to be the main supplier to this plant. We are hopeful that the supply to this plant will start to contribute significantly to the group’s revenue in the near future.”

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